Web 2.0 is a rabbit hole, and any conventional wisdom / best business practice you pick up on the surface isn’t coming down with you.
A new conventional wisdom is emerging, though, and it goes like this: launch free. Burn the business plans. Pay no attention to profit. Focus on building usage. Establishing your business means gaining traction and little else.
Yesterday, Feedlounge got scolded by Michael Arrington for not playing along and trying to charge for a service that should have been free. Clip:
But to blindly follow the idea that software must not be free because, damnit, people put a lot of time and effort into it, means you probably shouldn’t be making the business decisions for your company. And if you are entering what is already a commoditized business (online feed readers in this case) that has a price point of zero, you are absolutely crazy to try to charge for that product.
Arrington may or may not have been on tilt when he launched his post, but he has a point.
Launching a paytoplay service in the midst of free alternatives makes little sense. Feedlounge allowed a single day to try their reader before committing to pay for the service. I think it’s safe to say (now that they’re closing shop) that was too abrupt, and the fact that they didn’t offer a free version of their service made it easy for lighter, cheaper (free) alternatives to pick off their base.
But there’s a lot more to the conversation. Services like Feedlounge have development time, hosting and attention to recover, and gaining significant usage by launching free increases that drain.
Believe it or not, outside funding / [AdSense] click-happy members aren’t global solutions. And web 2.0 fans will pay for services provided the value is apparent.
I remember the days when the w2o authorities included Pro Account options among the acceptable practices when launching a new service. Startups could actually charge for their services. Remember the freemium model? I used to like it.
4 Responses to “Where do I log in to update the web 2.0 conventional wisdom page?”
I don’t understand why TechCrunch treats “web 2.0″ applications as though they’re this completely ahistoric phenomenon. It’s a pretty natural evolution from BBS, forums, mailing-lists and any other old-school communication technology. It’s not even much of a stretch to think of a web 2.0 application as a mailing list with formal rules for message content; web 2.0 is about sending messages (in the form of movies, links, SMS or even good old text) to your peer network from the user perspective. From the application provider prospective, it’s about money.
Yahoo has been tacking ads onto the bottom of its emails for years, ads have been displayed on-line for years and people have been buying software that fits their needs (or that had a good salesman) for years. Different companies have different approaches: there’s no one-size-fits-all business model for web companies, just like there isn’t one for architects.
When I see techCrunch constantly preaching the same method, it reeks of propaganda to me. That’s why I don’t read it, and why I might sound like a complete jackass. C’est la vie.
Ignoring Techcrunch for a minute… If a client tells us they’re looking for a web2o-style app, we understand what they’re getting at. Same holds true if that client then tells us they’re aiming at a web2o audience. The w2o label has become popularized.
That said, generalizations are generally bad. There is no one-size-fits-anything – I agree completely. Just as I’d agree that practicing one-step sparring won’t keep you from getting beat down.
[...] “Launching a paytoplay service in the midst of free alternatives makes little sense…But … [...]
[...] not sure what this all means. I was just getting used to the “screw the business model” concept. Maybe I need to track down some outside funding and play in the cash-flow negative [...]